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Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in th
by iepathos 4y ago
Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in the US, so anyone getting laid off is being hired back almost immediately with very little slack. The Fed would actually prefer to see higher unemployment around 6% to better manage inflation so they'll keep interest rates high until they see that happen.
- deleted 4y ago[deleted]
- zapt02 4y agoThe problem is that many people has less money to go around due to cost of goods and interest rates rising, so it's harder than ever to take advantage of lower stock market prices.
- notch656a 4y agoTime that market.
- Retric 4y agoYou can cost dollar average without timing anything. Essentially you discover after the fact what was the best time to invest. Which is surprisingly hard to pull off long term as most people are forced to take money out when they run into financial issues which then correlates with down markets.
- conorcleary 4y agoAverage down and buy the dip are real.
- 2OEH8eoCRo0 4y agoSomeone I know kept averaging down and put in everything that he had as the dotcom bubble was bursting.
- shrimpx 4y agoAnd did they hold a couple more years? Or for some reason they sold at bottom after averaging down?
- blindriver 4y agoMost dot-com stocks went to 0. There's a famous "99 percent club" of stocks that became wallpaper.
- chii 4y agobut if you followed the advice of modern portfolio theory, you would've purchased a diversified set of stocks (cap weighted) during the dotcom bubble, including companies such as google, amazon, and apple. I think even if 99% of the purchases went to zero, you'd probably still be ahead if you're diversified properly.
- cma 4y agoGoogle went public in 2004.
- twblalock 4y agoStocks? Sure. But there is no reason crypto couldn’t go all the way to zero.
- JohnJamesRambo 4y agoWhat a novel and original argument. Actually Bitcoin and Ethereum have a known supply and limited inflation (Ethereum is actually deflationary now) so best suited to not go to zero. The USD on the other hand… https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL https://ultrasound.money/ https://ultrasound.money/
- eloff 4y agoWith stocks, you're purchasing future profits. That puts a floor under things. With crypto you're purchasing??? There's no floor. It has limited utility.
- danuker 4y agoThe floor denominated in dollars can still go to zero. The utility of Bitcoin is its global payment network.
- schrodinger 4y agoThe floor of dollars is the might of the US military. If you haven’t noticed it’s prettttty strong these days.
- scottiebarnes 4y agoThe military has the power to stop hyperinflation?
- GoOnThenDoTell 4y agoYes. It’s cringe but a war in the right circumstances could stop price growth in the US
- p1necone 4y agoStocks don't lose value, they just go on sale ;)
- guelo 4y agoThe unemployment rate was 3.5% months ago, there is a lag in government reporting. The rate can also vary greatly by industry, a laidoff software engineer is not going to be looking for McDonalds jobs.
- yrgulation 4y agoDepends. Not everyone needs leet code programmers.
- slaw 4y agoDow is 10% higher than pre-lockdowns Feb 2020 and I hear at least since 2017 that stocks are overvalued.
- cma 4y agoThere has been close to 20% inflation since then.
- staticman2 4y agoLooks like closer to 15%.
- blindriver 4y agoThe problem is that right now it's not a valley. It's a downhill slope. Once it reaches a valley, I agree that it's probably a good place to buy, but we're not there yet!
- TuringNYC 4y ago>> Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. Half the people in this Robinhood cohort are writing weekly leveraged (non-cash secured) puts and/or put spreads or long calls. With that popular strategy, one big market move and you're wiped out.
- JeremyNT 4y ago> Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. Is this actually a "valley" though? I'm not sure about that. It could be the worst of this recession is yet to come for both types of assets. Buying at the bottom is a great idea, but the hard part is knowing where the bottom actually is.
- sentientslug 4y agoDollar-Cost Averaging is the way to go. It doesn't matter whether the stock market is up or down.
- vasco 4y agoUntil it drops enough that the DCA crowd gets scared. People have been told by reddit that there's an easy way to riches, by just blindly DCAing every month, and most people have blindly accepted this gospel. It just has to go low enough for the spell to break. It's as if not everyone can be rich with this one simple trick of dumping your hard earned cash into buying whatever Blackrock is dumping on you every month till eternity.
- djbusby 4y agoDCA into Vanguard may be ok. Things are on sale now, if you believe in USA over next 20 years.
- cheriot 4y agoI'd wager anyone doing that for 30 years will do quite well. It's when people get impatient and take crazy risks that they get in trouble. > buying whatever Blackrock is dumping The amount of money it would take to move the price of the S&P 500 is incredible.
- jsemrau 4y agoUsually a great strategy. However, 2020-2021 were an artificially created equity bubble. I don't think we will see this coming back anytime soon. https://i.imgur.com/MsIGcSo.png https://i.imgur.com/MsIGcSo.png
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- JumpCrisscross 4y ago> it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks Robinhood was not optimised for investors. It was built to resemble a slot machine.
- solumunus 4y agoTech is still overvalued by any standard metric. We're not deep enough in the valley yet.